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Tejas Networks Ltd.

BSE: 540595 Sector: Telecom
NSE: TEJASNET ISIN Code: INE010J01012
BSE 00:00 | 20 May 439.70 8.55
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NSE 00:00 | 20 May 439.40
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OPEN 440.00
PREVIOUS CLOSE 431.15
VOLUME 34657
52-Week high 578.45
52-Week low 163.15
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Mkt Cap.(Rs cr) 6,659
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OPEN 440.00
CLOSE 431.15
VOLUME 34657
52-Week high 578.45
52-Week low 163.15
P/E
Mkt Cap.(Rs cr) 6,659
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tejas Networks Ltd. (TEJASNET) - Auditors Report

Company auditors report

To the Members of

Tejas Networks Limited

Report on the audit of the Standalone financial statements

Opinion

1. We have audited the accompanying standalone financial statements of Tejas NetworksLimited ("the Company") which comprise the Balance Sheet as at March 31 2021the statement of Profit and Loss (including Other Comprehensive Income) Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 and total comprehensive income(comprising of profit and other comprehensive income) changes in equity and its cashflows for the year then ended.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Emphasis of Matter

4. We draw your attention to the following : a. Note 39 to the standalone financialstatements which explains the uncertainties and the management's assessment of thefinancial impact due to restrictions and other conditions related to the COVID-19 pandemicsituation for which a definitive assessment of the impact in the subsequent period ishighly dependent upon circumstances as they evolve. b. Note 28(A)(i) to the standalonefinancial statements regarding overdue trade receivables (due for more than 180 days fromthe due date for payment) from public sector customers aggregating to ` 91.19 crore (netof provision) included in Note 6 ‘Trade Receivables' as at year end. The Company'sManagement believes that the aforesaid receivables are good and fully recoverable and thatno additional allowances for credit losses are necessary in respect of these balances asat March 31 2021. Our opinion is not modified in respect of these matters.

Key Audit Matters

5. Key audit matters are those matters that in our professional judgement were ofmost significance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters.

Description
Appropriateness of contingent liability disclosed in respect of an Indirect tax matter (Refer note 30.1 to the standalone financial statements)
The Company in earlier years had received Orders from the Customs Excise and Service Tax Appellate Tribunal (CESTAT) and Commissioner of Central excise with respect to applicability of excise duty on software used as part of the multiplexer products during the financial years from 2002-03 to 2009-10 and inclusion of the value of the software for the purpose of arriving at the assessable value for calculating the excise duty liability on the product. During the year 2019-20 the Adjudicating Authority determined the liability of the company in this matter at ` 42.92 crore representing the differential duty and penalty. The Company filed appeals with the Supreme Court and CESTAT against the above Orders/demand. Further the Company has received show cause notices in respect of this matter amounting to ` 3.01 crore for the financial years 2010-11 to 2013-14 to which it has responded.
Significant management judgement is required in assessing the appropriateness of the amount of contingent liability to be disclosed and in assessing the likelihood of ultimate outcome of the dispute which is supported by opinion obtained from the Company's external legal counsel and is accordingly determined as a key audit matter.
How our audit addressed the key audit matter
Our audit procedures which involved applying materiality and sampling techniques included the following:
• Understanding evaluating and testing the design and operating effectiveness of the controls in respect of identifying tax exposures their accounting and disclosures.
• Reading correspondence from the concerned tax authorities. • Circularising letter to the external legal counsel of the Company for obtaining the status of litigations.
• Evaluating the objectivity competence and capabilities of such external legal counsel.
• Reading the opinion of the external legal counsel provided by the management in respect of the applicability of excise duty on software used as part of the multiplexer products.
• Involving auditor's tax experts to assess management's positions for significant tax exposures in light of the dynamic tax environment and existing jurisprudence to assess the key judgements made by the Company.
• Assessing the appropriateness of the disclosures relating to the aforesaid matter.
Based on the above procedures performed we found the judgements made by the Management in considering this matter as contingent liability and disclosure thereof to be reasonable.
Description
Assessment of the carrying value of Intangible Assets (including intangibles under development)
Refer to notes 4(b) and 30.8 to the standalone financial statements.
The Company undertakes development of various products and capitalises expenditure that qualifies for recognition as intangible assets (product development). Such expenditure predominantly represents internal manpower costs incurred on such projects. Up to the stage the products are ready to be put to use the Company records the qualifying expenditure as ‘intangible assets under development'.
The assessment of the carrying values of intangible assets (including intangibles under development) is dependent on future economic benefits expected to be generated by such assets and if these are below the carrying value there is a risk that the assets are impaired.
The Company has carried out an impairment assessment of intangible assets (including intangibles under development) and concluded that the future economic benefits expected to be generated from these assets are higher than the carrying amounts of such assets. Accordingly no adjustment to the carrying amount of intangible assets (including intangibles under development) is considered necessary as at March 31 2021.
We considered this a key audit matter as:
• The amounts involved were material.
• The review of carrying values of intangible assets including intangible assets under development performed by the Company involves a number of significant judgements and estimates such as expected future economic benefits estimated profit margins and discount rates.
How our audit addressed the matter?
Our audit procedures which involved applying materiality and sampling techniques included the following:
• Understanding evaluating and testing the design and operating effectiveness of the controls in respect of the Company's processes for assessing the recoverable values of intangible assets (including intangibles under development).
• Testing the capital funding request forms and other documentation to ensure that the projects were appropriately approved by the Chief
Operating Officer and Chief Financial Officer as per the delegated authority matrix.
• Obtaining an understanding of the selected capitalized projects testing time charged to such projects by tracing back to time sheet data agreeing cost of external contractors to vendor invoices.
• Testing a sample of projects to ensure appropriate capitalisation of qualifying employee cost and cost of external contractors.
• Assessing whether sufficient economic benefits are likely to flow from the projects to support the values capitalised.
• Analysing the reasonableness of key management assumptions and estimates used in the impairment analysis (e.g. forecasted revenue margin percentages etc.)
• Involvement of auditor's experts for evaluating the appropriateness of the underlying assumptions such as discount rate and assessing the methodology of impairment workings.
Based on our procedures performed above we noted the management's assessment of the carrying value of intangible assets (including intangibles under development) to be reasonable.
Description
Assessment of recoverability of Deferred Tax Assets (DTA) on tax losses and tax credits with respect to Minimum Alternate Tax (MAT)
(Refer notes 2.14 10 and 26 to the standalone financial statements.)
• The Company has recognised DTA of ` 7.05 crore on unabsorbed depreciation and business losses carried forward from the previous years (together referred to hereinafter as "tax losses"). Further the Company has also recognised DTA on tax credits with respect to Minimum Alternate Tax (MAT) aggregating to ` 44.14 crore.
• DTA has not been recognised on certain matters including weighted deduction for Expenditure on Scientific Research under Section 35(2AB) of the Income-tax Act 1961 for earlier years which are disputed by the income tax authorities.
• DTA has been recognised on the basis of Company's assessment of availability of future taxable profit to be able to utilise such tax losses and tax credits. The recoverability of the DTA depends upon factors such as the projected taxable profits of business the period considered for such projections the rate at which those profits will be taxed period over which tax losses will be available for recovery and the likely outcome of disputes pending with the tax authorities.
• The assessment of DTA is considered a key audit matter as the amounts involved are material to the financial statements and significant estimates and judgement are involved in assessing the amount of DTA and also in relation to preparation of forecasts of future taxable profits based on the underlying business plans.
How our audit addressed the matter?
Evaluation of the design and testing of the operating effectiveness of Company's controls relating to taxation and the assessment of carrying amount of DTA relating to unabsorbed tax losses and tax credits;
• Testing the appropriateness of the amount of DTA by tracing the tax losses and the tax credits to the income tax returns filed and assessment orders received by the Company and evaluating the judgement made by the Company on the amounts disputed by the Income Tax Authorities.
• Assessing the reasonableness of the period of projections used in the deferred tax asset recoverability assessment.
• Testing whether projections prepared by the Company were consistent with our understanding and knowledge of current business and the general economic environment in which the Company operates and whether the tax losses and MAT can be utilized within the recoupment period.
• Assessing appropriateness of the assumptions used in the projections of future taxable profits.
• Reviewing the adequacy of disclosures made in the financial statements with regard to deferred taxes.
Based on the above procedures performed our testing did not identify any significant exceptions with respect to the reasonableness of the assumptions and estimates used by the management in assessing the recoverability of DTA recognised in respect of tax losses and tax credits as at year end.

Other Information

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report Corporate Governance Report and Shareholder information but does notinclude the financial statements and our auditor's report thereon.

7. Our opinion on the financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.

8. In connection with our audit of the financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the financialstatements

9. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

10. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

11. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

12. As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

13. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. 14. Wealso provide those charged with governance with a statement that we have complied withrelevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

16. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of Section 143(11) of theAct we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4of the Order to the extent applicable. 17. As required by Section 143(3) of the Act wereport that: a) We have sought and obtained all the information and explanations which tothe best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2021 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 30.1 to the financial statements;

ii) The Company has long-term contracts as at March 31 2021 for which there are nomaterial foreseeable losses. The Company has made provision as required under theapplicable law or accounting standards for material foreseeable losses if any onderivative contracts;

iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2021.

iv) The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2021.

18. The Company has paid/ provided for managerial remuneration to the whole-timedirectors in accordance with the provisions of Section 197 read with Schedule V to theAct. Further as stated in Note 30.6(ii) to the financial statements the Company proposesto obtain required approval of the shareholders at the ensuing annual general meeting forremuneration aggregating to ` 0.32 crore proposed to be paid to the independent directors.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Mohan Danivas S A
Partner
Place: Bengaluru Membership Number: 209136
Date: April 21 2021 UDIN: 21209136AAAABC5118

Annexure A to Independent Auditors' Report

Referred to in paragraph 17(f) of the Independent Auditors' Report of even date to themembers of Tejas Networks Limited on the standalone financial statements for the yearended March 31 2021.

Report on the Internal Financial Controls with reference to financial statements underSection 143(3)(i) of the Act

1. We have audited the internal financial controls with reference to financialstatements of Tejas Networks Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2021 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by ICAI. Also refer paragraph 4 of the main standalone auditreport.

Firm Registration Number: 012754N/N500016
Mohan Danivas S A
Partner
Place: Bengaluru Membership Number: 209136
Date: April 21 2021 UDIN: 21209136AAAABC5118

Annexure B to Independent Auditor's Report

Referred to in paragraph 16 of the Independent Auditors' Report of even date to themembers of Tejas Networks Limited on the standalone financial statements for the yearended March 31 2021.

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of 3 years which in our opinionis reasonable having regard to the size of the Company and the nature of its assets.Pursuant to the programme a portion of the fixed assets has been physically verified bythe Management during the year and no material discrepancies have been noticed on suchverification.

(c) The Company does not own any immovable properties as disclosed in 4(a) on Propertyplant and equipment to the standalone financial statements. Therefore the provisions ofClause 3(i)(c) of the Order are not applicable to the Company.

ii. The physical verification of inventory (excluding stocks with third parties) havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii) (a) (iii)(b)and (iii)(c) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the investments made. The Company has not granted any loans or provided anyguarantees or security to the parties covered under Section 185 and 186.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified. vi. Pursuant to the rules made by the Central Government of India the Companyis required to maintain cost records as specified under Section 148(1) of the Act inrespect of its products.

We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of tax deducted at source though there has been aslight delay in a few cases and is regular in depositing undisputed statutory duesincluding provident fund employees' state insurance sales tax income tax service taxduty of customs duty of excise value added tax cess goods and services tax and othermaterial statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of service-tax duty of customs and goods andservice tax which have not been deposited on account of any dispute.

The particulars of dues of income tax sales tax duty of excise and value added tax asat March 31 2021 which have not been deposited on account of a dispute are as follows:

in Rs. crore
Name of the Statue Nature of Dues Amount Gross Period to which the amount relates Forum where the dispute is pending Amount paid under protest
Central Excise Act 1944 Tax interest and penalty 42.92 2002-10 Supreme Court and CESTAT Chennai 2.38
Central Excise Act 1944 Tax interest and penalty 0.71 2012-13 CESTAT Chennai 0.20
Central Sales Tax Act 1956 Tax and interest 0.45 2010-11 DCCT (Audit) Bangalore -
Central Sales Tax Act 1956 Tax and interest 0.13 2011-12 DCCT (Audit) Bangalore -
Karnataka Value Added Tax Act 2003 Tax interest and penalty 0.21 2011-12 DCCT (Audit) Bangalore -
West Bengal Value Added Tax Act 2003 Tax and interest 0.51 2014-15 West Bengal Sales Tax Appellate Revisionary Board 0.05
Income Tax Act 1961 Tax and interest 6.50 2009-10 Income Tax Appellate Tribunal 0.08
Tax and interest 1.19 2010-11 Income Tax Appellate Tribunal 0.05
0.01 2020-21 Commissioner (Appeals) Bangalore. 0.01
6.11 2015-16 to 2018-19 Commissioner (Appeals) Bangalore 6.11
Customs Act 1962 Tax 0.14 2018-19 Commissioner (Appeals) Chennai 0.14
0.02 2020-21 Commissioner (Appeals) Bangalore 0.02

Note: The disputed dues above do not include demands received by the Company from theDeputy Commissioner of Commercial Taxes (DCCT) for ` 5.04 crore under the Karnataka ValueAdded Tax (KVAT) relating FY 2016-17 and demand for ` 8.94 crore under the CentralSales Tax (CST) Act 1956 relating to FY 2016-17. Subsequent to the year end the Companyhas filed a rectification application with the DCCT in respect of the aforementionedorders.

viii. As the Company does not have any loans or borrowings from any financialinstitution or bank or Government nor has it issued any debentures as at the balancesheet date the provisions of Clause 3(viii) of the Order are not applicable to theCompany.

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid/ provided for managerial remuneration to the whole-timedirectors in accordance with the provisions of Section 197 read with Schedule V to theAct. Further as stated in Note 30.6(ii) to the financial statements the Company proposesto obtain required approval of the shareholders at the ensuing annual general meeting forremuneration aggregating to ` 0.32 crore proposed to be paid to the independent directors.Also refer paragraph 18 of our main standalone audit report.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone financial statements as required underIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

Accordingly the provisions of Clause 3(xvi) of the Order are not applicable to theCompany.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Mohan Danivas S A
Partner
Place: Bengaluru Membership Number: 209136
Date: April 21 2021 UDIN: 21209136AAAABC5118

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